03.18.09
European high grade cobalt edges up on China offers
LONDON (Metal-Pages) 17-Mar-09. European spot cobalt prices have traded up 50 cents a pound on high grade, with no change on lesser grades, in line with increased offers in China, where domestic demand has been increasing lately.
Dealers said the move was due to firmer prices in China and the impact of recent production cuts, particularly in Africa, on supply. However, they reckon stronger prices in China have been mostly down to traders having a punt up to $ 20 a pound, only to then to re-sell that material to book a quick profit.
Yet while it may be difficult to source 5 tonnes of material, demand has been weak, dealers said.
“The market is cautious as there has been an increase in business activity, although it seems to be mostly inter-merchant deals, with little going to consumers, who have been cutting their melt rates due to weaker demand from their customers,” one dealer said.
Long positions are few and thinly spread in a limited period due to weak demand everywhere else in the world, which is expected to outweigh any increase in Chinese demand, dealers said.
Some of the recent Chinese deals have been bought medium-term on an in-warehouse basis in Rotterdam, while some will be shipped in the coming days due to virtually empty warehouses in Singapore and Japan, dealers said.
The spot price of cobalt, which is used in chemicals, batteries, land-based turbines and power generators, is around $ 12.50-14.50/lb, while lesser grades are some $ 10-12.50/lb.
Cobalt is also alloyed with other metals and used in jet engines, where alloys with high melting points are essential. Other off-take areas are hybrid motors. Annual world supply and consumption has been typically balanced at some 50,000 tonnes in recent years, with China taking a more prominent role as a producer, as well as a consumer.
